Deng Xiaoping and the Transformation of China (132 page)

The transformation of rural to urban society and the growth of a stronger national culture derived not from any plan of Deng or his colleagues. Deng did try to break down regional loyalties within the military so that soldiers would serve commanders from other regions. He did promote the teaching of Mandarin so people from one locality could communicate with men and women from other areas of China. But the growth of urban society and a national culture derived less from conscious planning and more from the new urban opportunities and the appeal of city life to so many rural youth. Once these changes began occurring, however, officials involved in planning adjusted to the changing realities. They began to reorganize the administration of local areas, allowing cities to expand their administrative reach to include surrounding rural counties and allowing towns and counties to restructure as they became cities.

Paradoxically, the open mobility that began with the Deng era had a far more revolutionary influence on the structure of society than the so-called Mao revolution that had imposed rigid social barriers. The transition from a predominantly rural to a predominantly urban society and the spread of a common national culture are among the most fundamental changes that have occurred in Chinese society since the country's unification in 221
B.C
.

The Wild East

When China began opening in the 1980s, there were virtually no rules in place for food and drugs, product and workplace safety, working conditions, minimum wages, or construction codes.
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In the early 1980s, if an enterprising person found empty Coke bottles and filled them with a liquid of a similar color, there was no law against selling them as bottles of Coca Cola or some similar beverage. In the nineteenth century, in the United States and Europe, the rules and laws designed to protect the public by placing limits on what companies could do in pursuit of profits had evolved slowly. The situation in China under Deng was reminiscent of the rapacious capitalism of nineteenth-century Europe and the United States, when there were no anti-trust laws and no laws to protect workers. In China, when the markets suddenly exploded in the 1980s, there was no way to immediately enact a
comprehensive set of rules and laws adapted to Chinese conditions; nor was it possible to train officials right away to implement and enforce such rules and laws. In some ways the situation in China during the Deng era was also similar to the nineteenth-century American West before there were local laws and courts. Like gun-slinging sheriffs in dusty, out-of-the-way towns, Chinese officials responsible for local markets, in the absence of a well-developed court system, defined the law on their own.

One advantage of the Wild East, from the view of local officials and businesspeople, was that the small number of leaders in charge could make decisions far more rapidly than leaders in countries where more elaborate legal systems required “due process.” By the time Deng retired, rules and laws had been introduced in virtually every major sector of the economy by young Chinese legal scholars trained in the West, but implementation by local officials lagged behind because many saw the rules as too complicated and not in keeping with their personal interests. In some areas like international trade, where the Chinese worked closely with foreign partners, the Chinese partners adapted quickly to the use of international rules and laws. As economic relations expanded from small groups of people who knew one another personally and shared understandings, to larger groups that included links with regional, national, and even international partners, some rules and laws were needed so that agreements would hold up and inspire confidence among all parties.

It was difficult for Deng to create a more flexible, dynamic economy in China when after the Cultural Revolution so many were worried about being accused of allowing capitalist practices. Deng understood that if officials were too strict in enforcing the rules, it would be difficult for China's economy to take off. Deng, as usual, was more interested in producing results than in following some precise process. He believed some corruption was unavoidable. As he said, “When you open the door, flies will get in.” He wanted officials who dared to move boldly and he was willing to pay the price of allowing in some flies. Some of Deng's children have been accused of using their connections for personal purposes, but there is no evidence suggesting that Deng ever sought personal wealth for himself or for his family.

Deng knew, too, that if local officials were actively to support reforms and entrepreneurial activities, they had to be given some opportunity to improve their own living conditions. Reforms had all too often been stalled or even overturned in the Soviet Union and Eastern Europe by bureaucrats who could not see how their personal interests would be served by the reforms.
Deng wanted officials committed to reform and to the public good, so he allowed some local officials to get rich first if they brought economic success to their locality. Deng valued the importance of preserving the authority of local party officials in the eyes of the local public. To call attention publicly to the errors of officials who were otherwise making solid contributions to modernization ran the risk, in Deng's view, of making their jobs more difficult. But Deng made no effort to protect officials who upset the public, and he was ready to deal severely with any officials who were criticized by local citizens for rampant disregard of the public good. The death penalty has been used in China more frequently than in many countries to warn others who might be tempted to engage in similar criminal activities.

Opportunities for personal gain in the Wild East are almost endless. Officials who control access to land often receive gifts when they distribute permits for land use. When government enterprises are “privatized,” employees of the unit sometimes acquire shares in the enterprise at prices well below market prices. Leaders of state firms have been allowed to sell products on the market once they meet their targets, and they have often devoted considerable energy to such buying and selling. Trucks available after being used by a work unit for its core responsibilities have been allowed to transport and sell goods at a profit to improve the living conditions of the members of the unit. As a popular saying goes, in Mao's days, people were
“xiang qian kan”
(looking to the future), but since Deng's time they are
“xiang qian kan”
(with the same pronunciation)—looking for money.

The system Deng left his successors did not maintain a sharp separation between the private and public realms. Among local officials there was widespread variation in views about how much to accept from the businesses they supervised: New Year's presents? Introductions to jobs for relatives and friends? “Red envelopes” containing cash and, if acceptable, then how much cash? Opportunities for children to enter better schools or study abroad? Official cars or trucks for private use? The public, without an independent judiciary, is often reluctant to risk challenging local power holders who serve their own interests. China has only weak protections for those who are moved from their property to make way for construction projects, and businesses can work with government officials to take over property quickly with at best modest compensation to those who were previously living on or otherwise using that land. From the view of Chinese leaders, such links between local governments and builders are not necessarily improper and may allow enterprises to jumpstart their production and so more quickly provide employment for local residents.

Those who complain about corruption find it upsetting that officials and their family members flaunt public goods acquired through their connections or privileges, such as fancy banquets, cars, sumptuous clothing, or upscale homes. Candidates who have worked hard to pass examinations and to fulfill their work responsibilities become indignant when they see people whom they regard as less able promoted to higher positions or receiving more privileges because of their special connections.

Urban construction and the creation of public spaces in China are proceeding at a far faster pace than in most other countries. In cities like Guangzhou and Lanzhou, for example, within several years' time the government has been able to remove all the old structures for tens of miles along the river to make way for parks. At the peak of subway building, some large cities like Guangzhou and Beijing constructed an average of one entirely new subway line per year for several successive years. In just five years, new campuses at universities like Nanchang University or East China Normal University have sprung up with facilities for ten thousand students, including administration buildings, classroom buildings, auditoriums, dormitories, apartment projects for faculty and administrators, athletic facilities, and park-like campus spaces. Given these dramatic success stories, it is perhaps no surprise that in the view of Deng and his successors, the legal rights of individuals who had formerly occupied the land should not stand in the way of what they consider to be good for the greatest number of people.

China is not unique in the weak protection it has been giving to foreign patents and foreign copyrights. Similar problems have been found in Japan, South Korea, Taiwan, and other countries that have sought to make use of the newest technologies from abroad. Some Chinese companies have been careful to honor Western patents and copyrights, making payments and using foreign technologies in ways that do not violate their patents. But many Chinese enterprises have not exercised such care, and some Chinese once employed by foreign companies have started their own companies, sometimes illegally making use of the technology they had learned while on the job. Even Hong Kong, which is far stricter about enforcing laws than is mainland China, has found it difficult to prevent the pirating of songs and movies; the copied CDs, DVDs, and discs have sold at a fraction of the price of the patented products and so offer a hefty profit margin to those who engage in such illegal practices. When criticized and pressured by foreign companies and foreign governments for violating copyright laws, the Chinese government has on occasion closed down the enterprises and smashed the machines making the copies. Not long thereafter, however, other Chinese
entrepreneurs have been found brazenly producing similar copies in other locations.

Conditions for Chinese workers, including work hours, environmental conditions on the factory floor, and safety standards, have often not been better than some terrible Western working conditions at the early stage of the nineteenth-century Industrial Revolution. Some entrepreneurs have taken advantage of the lack of effective regulations concerning working conditions to give their workers only cramped dormitory spaces in which to live, and to offer them little in the way of safe working environments or quality standards.
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For tens of millions of rural Chinese youth, life in the factories in the coastal areas, as hard as it is and as poorly as they are paid, is far better than the grinding poverty they knew in the countryside. They have thus been willing to work long hours and even to hold back complaints for fear of being fired.

Factories built with Western and Japanese capital and managed by foreigners, while taking advantage of the cheap labor, have generally offered better working conditions than local enterprises. In many foreign factories, the spaces are well-lit with good air circulation, and in warmer climates, summer temperatures are kept well below the sweltering heat outside. In such factories, standards related to the number of hours in a workday, working conditions, and worker safety have been gradually introduced, and progress has been made in overcoming the most serious abuses. In these factories, too, some youth from poor areas learn the basics of modern living, including regular hours, cleanliness and hygiene, and discipline.
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Large numbers of foreign firms have built factories in China. By 2000, the largest branch of the U.S. Chamber of Commerce outside the United States was in Shanghai, and the Japanese Chamber of Commerce there, which was the largest Japanese Chamber of Commerce outside of Japan, was more than twice the size of the U.S. Chamber. Moreover, the numbers of Americans, Japanese, and Europeans in Shanghai pale in comparison with the number of Taiwanese businesspeople who are there. Why have so many businesspeople from abroad been flocking to a country where rules are not fully developed and where patents receive only limited legal protection? They have been attracted by the sheer dynamism of the place: the speed with which decisions can be made and implemented without the burden of complex legal procedures, and the quick pace of growth in markets of enormous scale. Although some foreign entrepreneurs have complained that they have been taken advantage of by their Chinese partners and by local Chinese government officials, others have found that the unusual combination of some legal protections,
relationships with reliable problem-solving local officials, and the possibility of appealing to higher authorities has created sufficiently promising opportunities that they are willing to take on whatever risks are involved.

Challenges for Deng's Successors

As a result of Deng's transformation, in the several decades after Deng left the stage, his successors have been confronted by a series of challenges that are likely to remain in the decades ahead. These challenges include:

PROVIDING UNIVERSAL SOCIAL SECURITY AND HEALTH CARE.
During Deng's era, those employed by the government, including the large state enterprises, had their health care and welfare benefits provided by the work unit, but such employees made up only a small proportion of the population.
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The government budget was far too small to provide retirement, health, and other welfare benefits for everyone. Toward the end of the 1980s, as the role of markets increased, those with large incomes could afford good medical treatment and provide for their own welfare needs. But vast numbers of Chinese people were still not offered health care and welfare benefits.